Wednesday, November 13, 2013

Crowdfunding and philanthropy

A colleague at The Monitor Institute pointed me to this "research" on crowdfunding. Some of it just blew my mind.

(Photo from http://www.crowdsourcing.org/editorial/crowdfunding-industry-trends-and-statistics-infographic/25662)

If these numbers are even close to correct, "social causes" (undefined in the "research") accounted for 38% of 2012 crowdfunding, which totalled $2.7 billion in 2012. That puts global social cause crowdfunding last year at $1,026,000,000. And this undefined category of "social cause" doesn't include the performing arts, film, music, or environmental projects. This is notable since a review of categories of funding on Kickstarter noted that dance projects were the most successful.

With the strong caveat that this isn't academic research, it's self-interested marketing "research," that's a lot of money.

I am interested in learning more about:

Where does institutional philanthropy fit in around these crowdfunded dollars? Are foundations funding projects before they raise money from the crowd, and then helping them raise those funds?

Are foundations tracking crowdfunding campaigns in the proposals they receive from nonprofits? What trends are they seeing? How are they thinking about this information as a signal about fundraising trends? Idea-testing trends?

I know of at least three start up consulting firms aimed at helping people run successful social good crowdfunding campaigns. There are probably 300 if not 3000 such firms. What do we know - what should we be tracking - about the emerging ecosystem around social cause crowdfunding?

I expect crowdfunding campaigns will play an increasing role in raising funds for disasters such as the Philippine typhoon. Who/where will those data be tracked?

My upcoming Blueprint 2014 (available December 4 at http://www.grantcraft.org/blueprint14) predicts a major crowdfunding scandal in 2014. So I'll be watching.

6 comments:

Hi Lucy,Erin Barnes, Nathaniel James, and I did a session at the 2013 Family Philanthropy conference partly inspired by the 2012 crowdfunding report. The session provided one set of responses to the intersection between traditional foundations/DAFs and crowdfunding. Blog post and downloads at http://tonymacklin.com/2013/02/28/connecting-family-philanthropy-with-social-giving/- Tony Macklin

Another trend-spotting post Lucy. This is part of the Brave New World of Good I was exploring on the Foundation Center's Philantopic blog and we need more transparency (read reliable data) to follow the money and assess the impact of online giving. Fascinating to think that the study you have cited about the evolving phenomenon of citizen philanthropy and online giving costs $495 to download. Moreover it is as far from open data as you can get--a heavily copyrighted, all rights reserved, .pdf document. Looks like somebody out there has a business model!

Thank you for your post! I am pretty sure that we will see more examples of foundations that try to link their grants to successes at crowdfunding platforms. We have a recent example in Germany: The Aventis Foundation cooperated with startnext. The funding budget of the programme "Kulturmut" was 200.000 euros. For more details: http://www.startnext.de/pages/kulturmutAs you can imagine, the debate regarding this approach was pretty controversial. All the best, Stephanie

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Why is this blog called Philanthropy 2173?

This is a blog about the future. The year 2173 seems sufficiently far enough in the future to give us some perspective. As sure as we are of ourselves now, talking about the future - and making philanthropic investments - requires that we keep a sense of modesty and humor about what we are doing. Philanthropy is for the long-term - for the year 2173.